Hot Topics:

Nonprofits hit Nangle's pay bill

State Rep. Dave Nangle of Lowell testifies at the Statehouse Tuesday on legislation he filed that would require some nonprofits to pay some taxes to their communities. SUN/CHRIS LISINSKI

BOSTON -- Lowell Rep. Dave Nangle's bill to tax the state's largest and most wealthy nonprofit organizations was met with opposition from about a half-dozen nonprofit leaders at a Tuesday morning public hearing on Beacon Hill.

Speaking before the state Legislature's Joint Committee on Revenue, the leaders advocated against a handful of bills, Nangle's among them, that would require payments or financial commitments from certain nonprofits.

"The pilot bills before you represent a step backward," said Matt Wilson, executive director of MASSCreative. "They would put the nonprofit arts community at risk."

Nangle has previously proposed legislation seeking to get nonprofits to contribute more to local cities and municipalities, but he believes his latest version, H3526, "strikes the right balance" by targeting only the most high-paying nonprofits.

Other bills opposed by nonprofit leaders during the same section of testimony Tuesday include H1565, which would require tax-exempt property owners to make payments equalling 25 percent of what the property tax would be for a private owner, and H2596, which calls for a commission to study group homes making payments in lieu of taxes.

And despite Nangle's promises that community nonprofits such as YMCAs and soup kitchens would not be affected by his bill, some leaders still included his proposal when expressing concern.

Taken together, Providers' Council President Michael Weekes said in his testimony, the bills and their financial requirements would create an "undue burden" on nonprofits.

Advertisement

"They would have serious unintended negative consequences," Michael Sullivan, who works with the Massachusetts Alliance of YMCAs, said in his testimony.

Nangle appeared later in the day to advocate on behalf of his bill, reiterating many of the points he raised in a visit with The Sun last week.

"I'm only looking at the top tier of nonprofit and charitable organizations," he said before the committee. "This absolutely will never reach down to the smaller nonprofits, the ones I say do God's work: soup kitchens, YMCAs, the Boys & Girls Clubs.

"

The draft bill proposes only targeting nonprofits whose five highest salaries add up to $2.5 million or more. Nangle estimated about 5 percent of the state's 38,000 nonprofits would fall into that category.

He said those on the top -- alleging that some pay their top executives up to $2 million per year -- "have some explaining to do."

"If large nonprofits are going to compensate their executives like a Fortune 500 company, they should pay the taxes of a Fortune 500 company," Nangle said.

Nangle's bill proposes two mechanics for requiring large nonprofits to contribute more.

Under the bill, in the first year that a nonprofit organization takes control of a property, it will be required to pay all of the property taxes owed. Each year, the organization will pay 25 percent less of the property taxes owed until the fourth year and every year beyond, when it will pay only 25 percent of the taxes owed.

The second mechanic allows municipalities to impose 50 percent taxes on property for the first three years and 25 percent taxes every year after that.

The bill also asks the state Attorney General's office to gather and report information on the compensation of each nonprofit's top five executives, information Nangle said is not yet kept up-to-date, and allows municipalities to grant complete tax exemptions for nonprofits who enter into a program to make payments in lieu of taxes.

The Joint Committee on Revenue listened to Tuesday's testimony, but members did not offer any opinions of their own Tuesday. They will likely review opinions from the public before taking the next step.

Welcome to your discussion forum: Sign in with a Disqus account or your social networking account for your comment to be posted immediately, provided it meets the guidelines. (READ HOW.)
Comments made here are the sole responsibility of the person posting them; these comments do not reflect the opinion of The Sun. So keep it civil.